Back in 2008, General Motors was looking for a battery supplier for its upcoming plug-in hybrid car, the Chevrolet Volt. A123 Systems, a small American company, was competing against LG Chem, the large Korean conglomerate. It was easy to compare the batteries, but there wasn’t any comparison possible between the 2 companies. A123 was a promising start-up, but would it still be in business the following year? Did it have the production capacity GM required? How about quality control?
GM chose the safety of LG Chem. It was the logical choice. Few people can imagine how difficult it is for a small company to make a deal with a huge corporation like GM. Sometimes, government’s help is needed, and that’s precisely what A123 Systems managed to get.
The battery maker won a $249.1 million grant from the government’s Electric Drive Battery and Component Manufacturing Initiative. It used it to build a factory in Livonia (Michigan). President Obama then, made a phone call to give his support on opening day, while A123 Systems won its first contract to supply batteries for a production model: the Fisker Karma. That was more an a year ago, and everybody since then, had been waiting for the next big move: a contract with a major automaker.
General Motors made that move last week. It announced that it had awarded A123 Systems a contract to supply “advanced Nanophosphate cells and fully integrated electronic components” without any further details. So we can only guess. It can’t be the Volt, so maybe another plug-in hybrid, or a pure electric car, but it’s a fantastic accomplishment for the battery maker, which will now rank as a GM supplier.